In November 2012, Ernst & Young LLP hosted its annual Ernst & Young Strategic Growth Forum® in Palm Springs, CA, an event that convenes more than 2,000 C-suite entrepreneurs and executives from high-growth companies across the US to forge connections and offer insights on leading business issues. At this year’s forum, Karyn Twaronite, Ernst & Young’s Americas Inclusiveness Officer, moderated a panel called “Diversity means business,” on the topic of strategic partnerships with women- and minority-owned businesses.

Twaronite kicked off the discussion saying, “I really have a front-row seat in seeing how critically important diversity is to our business, but also to our customers.” She shared supporting information from a DiversityInc benchmarking study, noting it found a direct link between high spend with underrepresented communities and higher recruitment, retention, engagement and customer loyalty.

Addressing the audience of entrepreneurs and c-suite executives, Twaronite asked for a show of hands to see how many of them had considered entering into a strategic partnership with a diversity-owned business – and many had. So, what was stopping some of them? Twaronite listed some common concerns about quality, capacity and margins. The panel discussion then started by debunking myths about these concerns by sharing the stories and specifics of several mutually beneficial strategic partnerships.

Diversity opens doors

Corporate initiatives to encourage diversity and inclusiveness have opened the door for many women- and minority-owned businesses, the panelists said, but are not the whole picture. “Diversity gets you into the door,” said Reubel, describing Kerma’s business partnership with Owens & Minor, a major supplier of health care products to hospitals. “But then you have to explain your value-added proposition, and get to know your customer,” he said. “Because if you’re not helping your customer gain additional revenue, then the relationship is not sustainable.” From Owens & Minor’s perspective, the relationship with Kerma enabled them to deepen their relationships with community and nonprofit hospitals.

AT&T’s partnership with Tempest was driven by the company’s mandate to source 21.5% of its equipment from diversity-owned suppliers. The partnership with Tempest blossomed when the woman-owned business helped AT&T build out a mobile network through Tempest’s experience as a supplier in Radio Access Networks.

The give and take of successful partnerships

“AT&T also gave us guidance on what they needed, so we went out and bought a company with experience in Distributed Antenna Systems,” Firestone said.

“The telecommunications industry has been a leader in the diversity space,” she said, “but you still have to provide quality services, be financially strong and prove you can support your customer over the long term. We’ve been very careful about how we’ve built our reputation with our customers.”

The membership of Mitchell & Titus LLP, the largest minority-owned accounting firm in the global Ernst & Young organization, has created similar opportunities on both sides, Johnson explained. “We were able to structure a relationship where they remain a minority firm, but they are also a member firm of Ernst & Young,” he said. “It allows us to first and most importantly help our clients achieve their objectives, it allows us to help M&T build capacity so they can take those services to market to other customers, and then finally it allows us to differentiate ourselves from our competitors.”

The overall message of the panel was clear – diversity and inclusiveness initiatives are vital for diverse-owned businesses to gain a toehold in the supply chain, yet delivering sustainable value is the key to continued success for those organizations.

Tips for supplier success

The panel closed with a lightning round of advice for current and future diverse suppliers. Some of their advice included:

Be patient and persevere – you want to be a partner, not a vendor.

Fine tune your value proposition. Understand the business and what its needs are so your value proposition will meet them.

Think big. Keep in mind that most big companies are always looking for opportunities, so use this to differentiate yourself and create further opportunities in the future.

You have to be willing to accept change and adapt. And learn about your customer – know what they don’tdo well. Use that and find your niche.

People do business with people. Build those relationships – invest in them.

Watch a video of the panel discussion, including all of the panelists’ tips and advice for current and future suppliers, here.

* This article features contributed content and has not been fact-checked or copy-edited by DiversityInc.